Grounds For Appeal

There is some substance behind the catty language and what may be at least one serious miscalculation by Jackson: his decision to abruptly end the proceedings without allowing Microsoft to call witnesses (including Gates) to discuss the remedies. This kept the case from dragging on until the end of the year, but it also denied the company an opportunity to mount an important defense. "The refusal to entertain any further debate was a mistake," says George Washington University law professor William Kovacic. "What Jackson was basically saying is that nothing was going to change his mind."

Errors of Fact

Since Microsoft can't enter new evidence on appeal, the company must argue that the government and the judge put the wrong spin on the stuff that's already in the record. This is familiar territory for Microsoft, which has long insisted that all those venomous e-mails and extracts from Gates' videotaped deposition were taken out of context. For example, Microsoft will claim that its brutal campaign against Netscape during the browser wars was ultimately benign, not anticompetitive; both sides issued rapid-fire improvements to their Web browsers, millions of programs were distributed for free, and the Internet revolution continued apace.

Where's the Harm?

Such arguments undermine the government's case on its weakest leg: proving that consumers have somehow been hurt by Microsoft's actions. The more Microsoft can make its behavior seem proconsumer, the less appropriate the government's draconian remedy will appear--and the more likely the higher courts will toss the case back to Jackson for a less severe punishment.

Which is not to say the case is a slam dunk for Microsoft. The company stubbornly clings to fixed ideas that backfired in Jackson's court and could easily backfire again. For example, Microsoft still plans to argue that it is not a monopoly--even though it controls more than 90% of the PC operating-system market. And it continues to claim that well-established antitrust laws do not apply to an industry dealing in 21st century technology. The company's almost religious zeal on these points won't help its image in the appeals court. "If you indiscriminately attack the record on too many fronts, your good arguments get lost," warns Kovacic, "and Microsoft is in a position where it can't afford any more missteps."

But if there's anything Microsoft's competitors know about the software giant it is that the company learns quickly from its mistakes. If Microsoft stays tightly focused on issues like consumer benefit, it may be able to whittle away at the remedies and delay their implementation long enough to render them moot. Only then can Gates allow himself a modest chuckle. --With reporting by Viveca Novak/Washington